The CDM: Kyoto's Carbon Offsetting Scheme

Allain Duhangan Dam in Himachal Pradesh, India
Allain Duhangan Dam in Himachal Pradesh, India
Michelle Arevalo-Carpenter, 2009

International Rivers’ experience in monitoring CDM projects has shown many serious flaws in its theory and application. Project proposal documents are marred by misleading and often patently false claims. International Rivers and others have explained these problems in numerous comments on specific hydro projects submitted during the CDM project approval process.

Fudges, Fraud and Storytelling

Many of the projects proposed (and many of those approved) for CDM credits are “non-additional.” This means that they would have taken place without help from sales of carbon credits. Some experts even suggest that as many as two-thirds of CDM offsets do not represent actual emissions cuts. The end result is that developed countries are avoiding having to reduce their own emissions by claiming credits for fictitious emission reductions.

Buying (Rip-)Offsets from Large Hydro

Projects in the CDM Pipeline by Type
Projects in the CDM Pipeline by Type
"Rip-Offsets" factsheet

The hydropower industry is particularly culpable in cheating the CDM system. By March 2013, 2,476 hydro projects with an installed capacity of 244,711 MW had applied for credits. If the UN body that administers the CDM approves these projects the hydro industry will make billions of dollars from the Northern consumers and taxpayers who will indirectly pay for the credits. Meanwhile the global climate – and the effectiveness and credibility of the Kyoto Protocol – will suffer.

Many observers agree that the supposed “sustainable development” benefits of the CDM have failed to materialize. Only a tiny minority of credits are being purchased from “additional” sustainable energy projects with clear environmental and social benefits.

A European Union law called the Linking Directive regulates the use of CDM credits within the EU’s internal carbon trading system. The directive states that large hydro credits entering the European Trading System must comply with the criteria and guidelines of the World Commission on Dams. To date, none of the large hydros in the CDM pipeline have proven WCD compliance.

More information: 

Learn about some of the worst projects in the CDM Hydro Hall of Shame


Citizen and NGO Tools

  • Guide: International Rivers Guide to the CDM and how to submit comments (in English and Spanish)
  • Toolkit: Carbon Market Watch's CDM Toolkit, available in English, Spanish, Hindi, Portuguese, French, Thai, Filipino and Chinese
  • Policy Brief: Carbon Market Watch's policy brief on hydropower in the EU Emissions Trading Scheme
  • Spreadsheet: Spreadsheet of CDM hydro projects
  • Database: BankTrack list of CDM dodgy deals financed by international private banks
  • Map: Sandbag's interactive offsets map allows you to visualize the international trade of carbon credits in 2009
  • Newsletter: Carbon Market Watch's newsletter offers the latest news, analysis and views in the world of CDM civil society.